Highlights:

  • The company’s data center division is largely responsible for the present growth trend.
  • Nvidia projected in late February that the addressable market for its chips and systems division is USD 300 billion.

Nvidia Corp.’s market value surpassed USD 1 trillion due to a stock price rise lasting more than a year.

When trading on the stock began at USD 405.95 per share at the opening bell, the chipmaker had officially reached the USD 1 trillion barriers. During trading, the price of Nvidia’s stock temporarily rose above that level before declining. The chipmaker must maintain a share price of USD 404.86 or above to sustain its USD 1 billion valuations.

With this achievement, Nvidia joins a specific group of only a few significant tech companies that have a market valuation of USD 1 trillion. The company’s outstanding quarterly earnings report from last week, which assisted in raising its stock price by 26% in a single day, partially contributed to the accomplishment.

On Wednesday, financial analysts anticipated Nvidia to report fiscal first-quarter revenues of USD 6.52 billion. Instead, the business reported USD 7.19 billion in revenue and forecasted that its sales for the current quarter would be approximately USD 4 billion higher than the consensus expectation.

The chipmaker’s stock price increased after its most recent earnings release, which was also above expectations. According to reports, Nvidia’s stock has risen by more than 166% in the last 12 months.

The company’s data center division is largely responsible for the present growth trend. The machine learning-optimized graphics processing units of the device are in high demand due to the industry’s quick adoption of AI models.

Nvidia described some of the factors that contributed to its recent revenue rise during a financial analyst event two months before its most recent earnings announcement. According to executives, the company’s developer ecosystem has increased by over a factor of two since 2020 to reach over four million engineers. The number of AI companies operating globally increased from 6,000 to 14,000 in the same period.

These startups are investing significantly in AI hardware, such as GPUs, to support their research and development initiatives. According to recent reports, some of the most well-funded AI startups reportedly want to invest more than USD 1 billion in infrastructure over the following several years. This pattern is boosting demand for Nvidia silicon.

The company’s strategy to keep raising sales and stock price doesn’t just concentrate on GPUs. Nvidia revealed earlier this week that total production of the GH200 Superchip, an integrated module that combines a GPU and a CPU, has begun. To increase the productivity of data centers, Nvidia also provides a variety of DPU processors.

The company projected in late February that the addressable market for its chips and systems division is USD 300 billion.

In August 2018, Apple Inc. passed the USD 1 trillion revenue mark, while Microsoft Corp. did likewise a few months later. Google LLC and Amazon.com Inc. both accomplished the same in January 2020, roughly two weeks apart.